Gold Surges Amid a Declining Dollar and Increased Anticipation of U.S. Rate Cuts
Gold prices saw a modest increase on Thursday, supported by a weaker U.S. dollar and growing market expectations that the Federal Reserve will cut interest rates in its upcoming September meeting. The precious metal also benefited from increasing global economic uncertainty, heightened by new tariff measures and anticipated changes in the Federal Reserve’s board composition.
Price Movements
As of 00:57 GMT, spot gold rose by 0.1% to $3,372.97 per ounce, while U.S. gold futures climbed 0.3% to $3,442.20. The U.S. dollar index hovered near its lowest levels in over a week, weighed down by unexpectedly weak U.S. employment data released last week, which in turn boosted expectations of monetary policy easing.
Fed Policy Outlook
According to the CME Group’s FedWatch Tool, market participants now assign a 95% probability to a 25-basis-point rate cut by the Federal Reserve in September — a significant jump from 48% just a week ago.
Minneapolis Fed President Neel Kashkari signaled that the central bank may have to reduce interest rates in the near term in response to a slowdown in the U.S. economy, although the long-term inflationary impact of existing tariffs remains uncertain.
New U.S. Tariffs on India
In a separate development likely to further strain global trade dynamics, President Donald Trump signed an executive order on Wednesday imposing a 25% tariff on goods imported from India. He accused the country of directly or indirectly importing Russian oil — a move that adds to previously announced 25% tariffs.
Safe-Haven Demand and Political Tension
Gold continues to thrive as a safe-haven asset during periods of political and economic volatility and tends to perform well in low-interest-rate environments. Investors are also closely watching for Trump’s upcoming nomination to fill a soon-to-be-vacant seat on the Federal Reserve Board — a decision that may influence the direction of future monetary policy.
Other Precious Metals Performance
Silver remained flat in spot trading at $37.83 per ounce.Platinum edged up 0.2% to $1,336.74.Palladium gained 0.7% to reach $1,139.98 per ounce.
Gold remains supported by a combination of factors, including a weakening dollar, rising expectations for Fed rate cuts, and increasing geopolitical and economic uncertainties. As markets await key decisions from the Federal Reserve and the White House, the short-term outlook for gold appears positive, particularly if dovish monetary signals continue to emerge.